Since their advent, cryptocurrencies have become essential in the field of economic exchanges. As a result, they are increasingly used to make payments. Considering the progress of this field, it is more than advisable to be well informed there. What do you really need to know before embarking on cryptocurrencies? Discover here three essential things to know about cryptocurrencies.
The birth of cryptocurrencies
A cryptomonnaie, it is above all an asset which is exchanged through a peer-to-peer network. This exchange takes place without a trusted third party and via a decentralized computer network. In order to secure transactions, cryptocurrencies use cryptographic technologies. The cryptocurrency protocol is responsible for regulating the issuance of new assets.
The first idea of creating cryptocurrencies dates back more than 30 years. The idea came from David Chaum, the founder of DigiCash Inc. Basically, he wanted to create a digital and virtual currency that could be used by the whole world to facilitate and secure transactions.
However, it was not until several years later to witness the creation of the first cryptocurrency. It was in 2009 that the iconic Bitcoin was born. It was the first cryptocurrency, and it was created by a certain Satoshi Nakamoto. A panoply of cryptocurrencies have sprung up as a result. Among them are:
- the Lite corner;
- the Binance coin;
- the Dogecoin.
There are a multitude of cryptocurrencies on the market today. Nevertheless, Bitcoin and Ethereum remain the cryptocurrencies with the greatest values.
Blockchain technology is the basis for a multitude of cryptocurrencies. Also called blockchain, the blockchain is a kind of public register of transactions. The expression blockchain is used to show that each new block is marked with the cryptographic fingerprint of the block that preceded it. As a result, it is impossible to modify a previous block without modifying its footprint. This is what gives blockchains their immutable character.
The operation of a public blockchain is based on a consensus model that is redistributed among all participants in the network. The birth or creation of a new transaction block requires compliance with a number of protocols and several steps.
Concepts used in cryptocurrency
The field of cryptocurrencies is very large and uses specific jargon. It is therefore imperative to know the basics before getting started. The most important are:
It is used to mark the start of a new project and allows parts to be distributed to eligible users.
This is a term used to refer to all cryptocurrencies except Bitcoin.
- Trust wallet
It is an application serving as an electronic wallet. It allows you to store cryptocurrencies.
- Private key
It is a succession of numbers and letters that is used as a kind of pin code to validate transactions.
- Cold storage
It is a technique that allows cryptocurrency to be stored online while waiting for it to rise in value.